MF Global CEO and Obama campaign bundler Jon Corzine gave "direct instructions" to transfer $200 million in customer funds to cover an account overdraft, Bloomberg reports.
Jon S. Corzine, MF Global Holding Ltd. (MFGLQ)’s chief executive officer, gave "direct instructions" to transfer $200 million from a customer fund account to meet an overdraft in one of the brokerage’s JPMorgan Chase & Co. (JPM) accounts in London, according to an e-mail sent by a firm executive.
Edith O’Brien, a treasurer for the firm, said in an e-mail sent the afternoon of Oct. 28, three days before the company collapsed, that the transfer of the funds was "Per JC’s direct instructions," according to a copy of a memo drafted by congressional investigators and obtained by Bloomberg News.
O’Brien’s internal e-mail came as the New York-based broker found intraday credit lines limited by JPMorgan, the firm’s clearing bank as well as one of its custodian banks for segregated customer funds, according to the memo, which was prepared for a March 28 House Financial Services subcommittee hearing on the firm’s collapse. O’Brien is scheduled to testify after being subpoenaed this week.
MF Global filed for bankruptcy in October 2011. The firm is currently under Congressional investigation and has yet to account for more than $1.2 billion in missing customer funds.
Corzine has testified that he "simply doesn’t know" where the money went.
Corzine’s role in the MF Global debacle has come under increased scrutiny due to his stature as a prominent Democratic fundraiser. According to the Obama 2012 campaign’s most recent bundler data, Corzine has raised more than $500,000 for the president’s reelection. He has personally contributed more than $275,000 to Democratic candidates and committees since 2007.
President Obama has described Corzine as the administration’s "Wall Street Guy." Before MF Global went bankrupt, Corzine was considered to be on the short list to succeed Timothy Geithner as Treasury Secretary. When Corzine was governor of New Jersey and up for reelection in 2009, Vice President Joe Biden told a crowd of supporters in Edison, N.J., that Corzine was one of the administration’s most trusted advisers during the financial crisis.
"I literally picked up the phone and called Jon Corzine and said, ‘Jon, what do you think we should do?’" Biden said. "The reason we called Jon is because we knew he knew about the economy, about world markets, about how we had to respond."
Published under: Cronyism , Financial Crisis , Financial Industry , Jon Corzine , Obama Administration